OR NO DEAL DEAL
Betty Low takes a look at the increasingly convoluted business of negotiated fares and corporate deals
Britain plus Northern Ireland. But what is it if Scotland votes 'yes' to independence? It’s a bit like that with travel management
O
and air fares. Once upon a time, large managed travel programmes qualified for preferential corporate rates or route deals because of how much they spent. Small managed programmes made use of TMCs’ rates. Unmanaged travel programmes bought the best price on the day, the published fare or what leisure travellers bought. And that was guaranteed to be the most expensive fare. But it’s no longer like that. Reduced rates
for large travel programmes still exist but they are no longer simply directly proportional to the volume of spend. The corporate or negotiated fare is usually a set discount off the fare. It is not generally applicable to all booking classes. The discount percentage may also vary according to the route. The negotiated rate may also not be a discount but a fixed fare although these are not as common as they once were. According to Roger Peters, senior
nce upon a time, you knew what was what. Great Britain was England, Scotland and Wales and the UK meant Great
purchasing manager at Capgemini, “Some airlines do offer fixed fares if you have a big volume going to a certain place in a specific fare class.” The discounts on offer will vary not only among corporates, booking classes and routes, but also from carrier to carrier. Peters, who is responsible for UK travel,
fleet and cars and global hotels and global fleet, says that all airlines will be “interested in a reasonable spend” but after that it will depend on the carrier. “Some will want market share on a route; some will want business in a certain country.” Matthew Pancaldi, global client manage- ment director at travel management company HRG, says, “The discount will vary according to routes and maybe booking classes. In some booking classes you might not get a discount at all.” Pancaldi also emphasises the importance
of recognising that incentives will vary among airlines. He says, “The national flag carrier will not offer the same level of discount in their home market that they do where they’re not the flag carrier. “Airlines are always after new business
they haven’t had before. A new route is an opportunity to get a discount on a route they’re about to fly a lot on.”
A buyer from a large financial organi-
sation says, “The real battleground is for business class passengers. If they [the airline] know you might disappear, they will price more aggressively. If they think there’s no threat of that, they won’t.” Roger Peters adds, “The best discounts
are available where there’s lots of competition. You won’t get much of a route deal on a monopoly.” The cost-cutting environment has also
affected fare construction. “The spend on a sector could be going down as the company tightens volumes and spends less money, but airlines will say ‘you can’t give us more sectors, but give us more market share’ and that’s what airlines often look for,” says Pancaldi. “Airlines are smart now. They’re not going
to put out a contract unless there’s a reasonable chance of fulfilling targets. If you don’t hit targets airlines are likely to withdraw discounts,” he adds. For those buyers without a significant spend, a TMC fare can be invaluable. Aisha Battersby, head of client relation-
ships at Corporate Traveller, says, “They [SMEs] may not have the volume to negotiate their own fare with one particular carrier. So we use our buying power so that
16 THE BUSINESS TRAVEL MAGAZINE
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76